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March 22, 2010

And So It Begins: Bond Market Weighs In On Unsustainable Debt Levels

But we are going to save sooooo much money that unicorns will be free! Who wouldn't lend us money based on that business plan?

The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

...“It’s a slap upside the head of the government,” said Mitchell Stapley, the chief fixed-income officer in Grand Rapids, Michigan, at Fifth Third Asset Management, which oversees $22 billion. “It could be the moment where hopefully you realize that risk is beginning to creep into your credit profile and the costs associated with that can be pretty scary.”

Much more at the link.

The bottom line is bond traders don't give a rat's ass about Hope, Change and Yes We Can! They are looking at the numbers and the US simply is borrowing way beyond its means. That's going to make debt less attractive to investors and as we run up more debt to pay for this crap, it will cost us more to entice buyers, that in turn runs up our debt and we're in a vicious cycle.

Oh and we will be running up a lot more debt. We all know the CBO numbers are fantasy but if you take a look at how wrong financial projections have been for previous social programs, you see just how screwed we are.

It's almost as if someone were trying to destroy the country or something.

ObamaCare delenda est!


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posted by DrewM. at 01:51 PM

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